$33 Trillion Sees China Become World’s Largest Banking System, Surpasses EU
China has become the world’s largest banking system, beating the Eurozone by $2 trillion in assets as of 2016.
China’s banking system has officially overtaken the Eurozone to become the world’s largest, figures released this month show.
Research data from the Financial Times reveal Chinese bank assets to have been worth $33 trillion at the end of 2016, while Eurozone assets totaled $31 trillion.
The usurping of the rest of the developed world in terms of banking prowess may come as little surprise given the sheer speed with which China has expanded its economy. However, commentators suggest the growth, in fact, belies the country’s true economic fragility.
Unlike in other developed markets, RT notes, China relies on bank loans to finance growth at a local level. Changing the status quo would impact Beijing’s ability to control the ecosystem.
“The massive size of China’s banking system is less a cause for celebration than a sign of an economy overly dependent on bank-financed investment, beset by inefficient resource allocation, and subject to enormous credit risks,” former IMF China Division Head Eswar Prasad told the publication.
For comparison, the Financial Times showed US banking assets to be worth $16 trillion.
China, meanwhile, appears to be on the cusp of launching a fully-regulated environment for cryptocurrency. Statements from domestic exchanges released on Tuesday suggest that customers will be asked to provide proof of origin and destination of trading funds, hinting that Bitcoin withdrawals could recommence imminently.